IEA workshop brings the importance of energy innovation policy in emerging and developing economies into focus

Experts from 11 countries – including Argentina, Brazil, Colombia, India, Kazakhstan, Kenya, Morocco and Nigeria, China and South Africa – came together today for a workshop hosted by the IEA on the importance of fostering clean energy innovation in emerging and developing economies with a focus on sharing lessons learned that can benefit others.

Representatives taking part in the workshop at IEA headquarters in Paris discussed how clean energy technology innovation is a key enabler of faster progress on climate change alongside economic development. As such, innovation policy is fast becoming a top priority for policymakers in emerging market and developing economies, as well as in advanced economies.

During the workshop, experts worked together to define a common set of policy insights that offer universal value to policymakers in countries around the world. These insights were then presented to government delegates at the IEA Committee on Energy Research and Technology on 5 March 2024.

Unlike in advanced economies, the understanding of clean energy innovation and the specific policy challenges in emerging and developing economies is limited. This hinders sound decision-making in these countries and makes it harder for the international community to provide support and guidance.

Over half of global investment to 2050 in clean energy assets is in emerging and developing economies in the IEA’s Net Zero Emissions by 2050 Scenario. This share could be even higher when considering investments to secure and process supplies of critical minerals. These investments, which underpin economic growth, will only be directed to low-emissions technologies if they are available, affordable and well-adapted to local contexts. While this is a significant innovation challenge domestically and internationally, it is aided by the ever-closer link between clean energy, such as renewable power, and manufacturing opportunities. Many countries, including some that previously had no stake in energy technology development, are evaluating opportunities to enter new value chains, moving up over the longer term. This is especially the case for internationally traded goods, a topic being taken up this year by the IEA for its Energy Technology Perspectives 2024 report.

To cast light on how policies have supported clean energy technology innovation in emerging and developing economies to date, a set of case studies is being developed to cover a range of country contexts. The stories that emerge from these case studies illustrate the specificities of emerging and developing economies but also, by looking at their experiences as a group, highlight common challenges and opportunities. The project team, led by the IEA in cooperation with the Indian Institute of Technology, Delhi, includes experts and practitioners from eleven countries. The resulting cases cover a variety of technology areas, including bioenergy; carbon capture, utilisation and storage (CCUS); electric vehicles; energy efficiency, hydrogen; mini-grids; nuclear; solar PV; ultra-high voltage (UHV) transmission and wind. The case studies will be published later this year.

The studies being developed reveal challenges facing developing economies that must be overcome by good policy design. These include fragile innovation ecosystems, higher costs of capital and macroeconomic volatility, weak institutions for evaluation and enforcement, and a notable reliance on international finance, standards and knowledge. When published later in 2024, the international community will find value in these case studies to help all countries accelerate innovation for clean energy transitions.

This work forms part of the Clean Energy Transitions in Emerging Economies programme, which is co-funded by the European Union and delivered within the IEA’s Clean Energy Transitions Programme.